SOURCE: Riverhead Resorts

July 18, 2008 13:23 ET

Riverhead Resorts' $2 Million Irrevocable Payment to Town Is Commitment for Project to Proceed

Action Underscores Confidence of the Project to Proceed to Completion Following Close of Six-Month Evaluation Period

RIVERHEAD, NY--(Marketwire - July 18, 2008) - In a move that formalizes the confidence and commitment of the Riverhead Resorts project to proceed with the proposed multibillion dollar resort and convention center on 755 acres of land on Long Island's east end, Riverhead Resorts Managing Member John Niven announced it will soon make a $2 million additional contract payment to the Town of Riverhead Community Development Agency as required by the contract agreed to in January of this year.

Mr. Niven stated, "We are pleased to be moving forward with the project with every confidence of our ability to proceed through the permitting process to meet our goal to start construction in 2010 and open for the winter holidays 2012." This payment marks the end of the investigative period, referred to as "due diligence" during which project representatives performed comprehensive environmental, zoning and engineering evaluations to determine if there were any previously unforeseen obstacles that would impede the successful permitting and development of the project.

Riverhead Resorts is comprised of Niven's Baldragon Homes of Dundee, Scotland, and New York's Bayrock Group. The $2.0 million August 2008 contract deposit is in addition to the $4.5 million previously paid on signing the contract in January. Don Secunda and Mitch Pally, partners in the Weber Law Group, the law firm managing the strategic direction of the development process for the complex outlined the payments made and pending pursuant to the contract. Of the January 2008 payment of $4.5 million, $2.5 million represented the initial contract deposit for the $155 million land acquisition, and the remaining $2.0 million was directed to the Town as partial payment towards a new Town Recreation Center and Animal Shelter. There will be an additional $6.0 million payment due at closing towards the Recreation Center and Animal Shelter.

Niven applauded the strength and depth of the Riverhead Resorts team efforts as they worked to reach this milestone. "Every member of our development team is the best in its field. We have Weber Law Group, HOK Architecture, Cameron Engineering, EDAW, Roux Associates, Amy S. Greene, The Institute for Long Island Archaeology, Lebenthal & Co. and LEDO International. Their collective hard work over these past months provided us with critical information that confirmed the feasibility of the project to proceed in terms of both site and market conditions. With the results of these comprehensive studies, we have affirmed our confidence to proceed with this payment."

The $2.1 billion project consists of eight (8) themed resorts with a convention center and family entertainment center. A central attraction will feature a 350-foot indoor ski mountain and an indoor waterpark, each of which will be climate controlled and open all year long. Also planned are 1,150 hotel "keys" spread over four hotels and 500 timeshares associated with the ski resort.

With the EPCAL site having lain dormant since the departure of Northrup Grumman over a decade ago, Riverhead Resorts represents a significant boost to the local and regional economy. This most recent $2 million payment to the Town is a direct infusion of cash to meet immediate budgetary needs. Don Secunda noted that, additional economic benefits of the project include:

--  Projected increase in Town of Riverhead current real property tax base
    by 10-12%, providing estimated $50 million in real property tax payments to
    County, Town, School District and other entities.
--  3,000 construction jobs, and 2,000-2,500 permanent full time jobs with
    preference being given to the Town of Riverhead residents and, indirectly,
    over 6,000 additional jobs in the greater community and region.
--  Planned arrangements with both Suffolk County Community College
    Culinary Arts Center and Riverhead School District for graduates'
    employment.
    

Riverhead Resorts continues to generate significant interest. "Not only are Long Islanders and NY Metro area residents anxious to enjoy this exciting destination only a couple of gallons of gas away," added Mitch Pally, "destinations such as Riverhead Resorts, providing opportunities for multi-generational and multi-interest vacationing, are the latest in resort offerings and planning."

According to Pally, project permitting efforts will continue with applications to the NYS Department of Environmental Conservation and local agencies, and designation of a Lead Agency to oversee review of the project's Draft Environmental Impact Statement through the State Environmental Quality Review Act process.

For more information on the Riverhead Resorts proposal please visit their web site at www.riverheadresorts.com.